A resignation must be clear and unequivocal
In Anderson v Total Instant Lawns Ltd, 2021 ONSC 2933 (Total Instant Lawns), an employee claimed her job was terminated and sought damages for wrongful dismissal. The employer denied the employee was dismissed and argued that she either resigned, repudiated, or abandoned her employment, and counterclaimed for breach of contract. The Ontario Superior Court of Justice sided with the employer, finding that the employee repudiated her employment contract and dismissed her wrongful dismissal claim.
The employee worked for the employer pursuant to a fixed-term contract. Her role was to schedule work crews, record workers’ hours, and prepare the payroll and cheques for the CEO’s signature. The employee’s husband was employed with the same company on a temporary basis, and his last day of work was July 6, 2018.
On July 6, 2018, when in the CEO’s office, the employee noticed that her husband’s last cheque was unsigned. Upon inquiry, she was advised that his hours were overstated; furthermore, there would be a deduction from his pay because he failed to bring his truck back to the office on his last day and another employee had to take time off to retrieve it.
The employee responded via text that she clocked hours as received and threatened to leave and return only when her husband received the pay she claimed was owing to him. When the employee and CEO failed to resolve the matter by phone the employee left the office. The employee stated that she left the office because she had a headache but intended to return. Another employee stated, however, that she told him that she had been fired by the CEO due to a dispute and was no longer working for the employer, and that she returned the office keys by putting them on the CEO’s desk.
That evening, most of the employer’s employees as well as the employee’s husband attended a meeting at the employee’s home. At this meeting, a “Strike Notice” was prepared and signed by several employees including the employee.
It demanded:
On July 7, 2018, another employee advised the CEO that the entire workforce had walked out and was refusing to work unless their demands were met and handed the CEO the Strike Notice. In response, the CEO sent the employee a text message notifying her that as of that moment she was barred from entering the employer’s properties, facilities, or job sites, and from accessing its computers or online accounts. The parties agreed that the employee’s employment ceased that day. While the CEO managed to persuade most of the employees to return to work, profits for the season were negatively impacted.
The employer argued that the employee left her employment with no intention of returning and, accordingly, she either resigned, repudiated, or abandoned her employment. The employee disputed this and argued that the CEO’s text message on July 7, 2018, was a clear and unequivocal termination.
At the outset of its decision, the court provided the following outline of the tests for the four legal concepts “at the heart of the analysis.” It stated:
The court declined to find that the employee resigned because she did not unequivocally indicate to the CEO that she was not returning to work. The court concluded that the employee repudiated her employment contract because the evidence indicated that as of July 6, 2018, she had no intention of returning to work unless certain conditions were met and, furthermore, she refused to perform her job responsibilities. In support of this conclusion, the court noted:
After concluding that the employee repudiated her employment contract, the court dismissed her wrongful dismissal action.
The court denied the employer’s claim for damages for wrongful resignation, stating that an employer could successfully make such a claim only if it could demonstrate that it suffered losses or costs in excess of what it saved by not paying the employee’s salary during the notice period.
The court noted that the CEO replaced the employee almost immediately by hiring a friend. Furthermore, as there was insufficient evidence to conclude that the employee organized the work stoppage, the court could not conclude that any losses suffered as a result of it were a direct result of the employee’s departure.
Total Instant Lawns is a useful decision for employers that encounter an employee who refuses to: (i) work unless new employment conditions are met, or (ii) perform their job responsibilities.
It indicates that employers facing these circumstances may terminate their employment relationship with the employee on the ground that the employee has repudiated the employment contract, provided the employer can demonstrate that that the employee’s refusal is directly incompatible with their employment obligations.
The ability to terminate an employment relationship on the ground of repudiation can be a helpful tool for employers that discover they have a challenging employee in their employ. Employers are encouraged to document the behavior of such employees to build a strong case for repudiation and to protect themselves should the employee make a claim for wrongful dismissal.
By Rhonda B. Levy, Knowledge Management Counsel at Littler, responsible for satisfying the firm's Canadian knowledge management needs, for monitoring legislative, regulatory and caselaw developments, and for drafting and editing publications.
By Barry Kuretzky, Partner at Littler counsels clients in the labour relations area, which includes collective bargaining, union organizing drives, certification and decertification of unions, grievances and arbitrations.
